California’s transition to clean energy is one of the most important investments we can make in our future. As we build a cleaner and more reliable electric grid, we must also ensure that customers are not required to pay for energy resources before we know when—and how much—new electricity demand will actually materialize.

San José Clean Energy (SJCE) recently submitted its 2026 Integrated Resource Plan to the California Public Utilities Commission. The plan outlines how SJCE intends to continue providing reliable, cleaner electricity and protect our customers from unnecessary costs.

As part of the filing, SJCE emphasized a simple principle: energy procurement should reflect the electricity customers are expected to use—not require them to pay today for uncertain demand that may not materialize years from now.

State Forecasts Double Expected Demand—and Could Cost Customers Millions

The planning forecast created and used by the state nearly doubles SJCE’s expected electricity demand by 2028, driven in part by projected growth from large energy users such as data centers. SJCE’s own forecast over the same time period shows far less demand, even when incorporating large energy users.

California should plan for growth. But there is significant uncertainty about when large projects will be built, how big they will be, and how much electricity they will ultimately use. Requiring energy providers to purchase large amounts of power years in advance based on uncertain demand could leave customers paying millions of dollars for energy they do not need.

SJCE believes there is a more accurate way to plan: use local data directly from cities.

As San José’s electricity provider, we incorporate local development information such as permitting, “on the ground” project timelines, customer-specific data, and other indicators that provide a clearer picture of expected growth.

Using this information, in its IRP SJCE modeled an alternative scenario that still meets California’s reliability and clean energy requirements but requires significantly less near-term procurement. Our analysis estimates that the planning costs under this locally informed scenario could be approximately 70% lower than the statewide forecast.

The goal is not to plan for less growth, but to more accurately forecast when that growth will materialize—and procure additional resources as demand becomes increasingly certain.

The State Has Made Progress—But We Need a Clearer Path Forward

California’s energy agencies face a difficult challenge: ensuring enough electricity is available years in advance while large-load development, technology, and customer demand are changing rapidly.

The California Energy Commission (CEC) has recognized this challenge and is beginning to incorporate more detailed information about large load growth into its forecasting process. We appreciated the opportunity to publicly discuss load growth further and present SJCE’s approach at two CEC meetings in August 2026.

That progress matters, and we still have to work to improve the process. The current procurement framework gives energy providers limited ability to adjust long-term purchasing obligations when updated, local information shows that projected demand has changed or remains uncertain.

Once a long-term contract is signed, those costs remain even if the anticipated demand never arrives. Customers ultimately bear that risk.

California needs a flexible mechanism that allows forecasts and procurement requirements to evolve as better information becomes available. For large new loads, SJCE believes this means tying forecasted load to milestones such as permitting approvals. State projections should also account for large customers that may bring their own generation and therefore, require less power from the grid.

A Smarter Procurement Pathway Can Prevent Unnecessary Customer Costs

A more flexible system does not mean compromising reliability. It means matching procurement decisions to the level of certainty around future demand.

As proposed projects move from concept to permitting to construction, the likelihood that they will come online increases, and procurement commitments should scale with that growing certainty. Because new generation can take years to build, energy providers cannot wait until demand is fully confirmed to begin securing resources. The question isn’t whether to procure; but how much and when. The size of those commitments should reflect how certain each project will materialize. This approach allows California to strike a better balance: to prepare for future demand while reducing the risk that current customers are locked into paying for decades of costs tied to projects that are delayed, downsized, or never built. That kind of adaptive planning is especially important as California competes for a limited supply of clean energy resources, including geothermal power, long-duration energy storage, transmission capacity, and high-quality wind projects.

Recognize the Clean Energy Resources Customers Already Have

California can effectively plan right-sized procurement, and advance affordability by better recognizing resources already operating in homes, businesses, and communities.

Rooftop solar, batteries, electric vehicles, smart thermostats, demand-response programs, and virtual power plants can reduce electricity use during periods of peak demand and provide real reliability value.

Current planning rules have not yet evolved to incorporate the full reliability value of these distributed energy resources and how they can improve affordability for customers. A practical framework should allow qualified distributed energy programs to reduce future procurement obligations and Resource Adequacy requirements, ensuring grid reliability and supporting the growth of new load, including data centers.

One immediate step is Senator Josh Becker’s SB 913, which proposes to expand opportunities for customer-owned energy resources to help meet California’s reliability needs alongside traditional power resources. The bill has passed the legislature and is on the Governor’s desk.

SB 913 is important, but broader reform is still needed so that distributed resources and better local forecasts are fully reflected in long-term procurement planning.

Local governments and communities can be essential partners in helping California get this right. By recognizing the value of local information and local energy resources, California can achieve reliability, climate progress, and affordability together. A smarter procurement pathway will help ensure that we do.